|
|
|
|
|
Pound Poised for Biggest Weekly Drop Against Dollar Since 2005 Agnes Lovasz The pound was headed for its biggest weekly drop against the dollar in more than 2 years as signs economic growth is slowing fueled speculation the Bank of England will cut its key interest rate as early as next month. The pound declined against 14 of the 16 most-actively traded currencies in the past week. It traded at the weakest against the euro in 4 1/2 years after retail sales unexpectedly dropped, reinforcing the case for lower borrowing costs. The central bank this week forecast economic growth will slow ``sharply'' next year and signaled at least one reduction in the benchmark rate. ``Sterling is likely to remain under pressure against the euro this year,'' said Martin McMahon, a currency strategist at Credit Suisse Group in Zurich. ``The inflation report was on the dovish side, retail sales weren't great, so it's understandable we see markets pricing in rate cuts, even before Christmas.''
The pound is headed for its biggest weekly decline against the dollar since the beginning of July 2005. It dropped to $2.0423 as of as of 8:44 a.m. in London, from $2.0451 late yesterday, and $2.0903 a week ago. Against the euro, the U.K. currency fell to 71.48 pence, from 71.46 pence yesterday and 70.22 at the end of last week. It declined to 71.67 yesterday, the weakest since June 2003. Government figures showed retail sales fell for the first time in nine months in October, dropping 0.1 percent, as shoppers bought less food and clothing, a sign interest-rates at a six- year high are curbing consumer spending.
|
||||
